PTSB offers to sell 400 homes to State housing agency

Lender is moving to get 2,000 properties off its books

PTSB chief executive Jeremy Masding told the Oireachtas finance committee that the bank intended to reduce its NPLs to a single-digit percentage by March next year. Photograph: Dara Mac Dónaill

Permanent TSB (PTSB) has offered 400 properties to the State’s housing agency as it seeks to remove its stock of about 2,000 properties from its books.

The lender has 1,100 vacant properties and 900 tenanted homes in its control and is now in the process of divesting itself of those interests, PTSB group director of operations Shane O’Sullivan told an Oireachtas finance committee.

Mr O’Sullivan said the Housing Agency was interested in about 250 of the 400 properties PTSB had suggested to it.

The committee is examining a range of matters relating to the banking sector including its non-performing loan (NPL) book.

PTSB chief executive Jeremy Masding told the committee that the bank intended to reduce its NPLs, currently hovering at about 26 per cent of its loan book, to a single-digit percentage by March next year.

Tracker mortgages

The committee also heard of the bank’s efforts to resolve the tracker mortgage issue, for which it has paid out €58 million to date.

In total, PTSB has set aside €145 million to deal with the tracker issue which has affected 1,979 accounts at the bank.

The bank has paid redress and compensation to 96 per cent of the customers involved and has been unable to contact 25 customers.

At the committee Mr Masding was questioned by Fianna Fáil finance spokesman Michael McGrath on the option for the 4,600 split mortgages which had been removed from Project Glas. “A capital markets alternative” is one being looked at by the bank to deal with the €900 million worth of split mortgages on its books. The bank currently has 6,168 split mortgages on its books.

It had earlier planned to sell the split loans as part of a larger portfolio sale, Project Glas, which now consists of €2.2 billion, representing about 11,200 properties.

Mr McGrath also raised the point that the bank’s 57,000 mortgage customers on the standard variable rate (SVR) of 4.5 per cent should immediately switch to the managed variable rate (MVR) product, which offers existing customers rates of between 3.7 per cent and 4.3 per cent.

Interest rates

“I would encourage customers who have SVRs to engage with us and take advantage of the MVR offer,” Mr Masding said before explaining that Irish interest rates are among the highest in European because capital costs, regulatory costs and liquidity costs are higher here.

Mr Masding also noted that the fixed interest rate offers available for existing customers are being reviewed. “This is an urgent issue given the manner in which the bank’s existing mortgage customers are being discriminated against,” Mr McGrath said.

PTSB has significantly reduced its private dwelling home NPLs from a peak of 21,500 in 2013 to 9,218 at the end of March. Some 1,465 were sold or surrendered voluntarily.

Nonetheless, investor confidence in the bank hasn’t been particularly strong in recent months, leading to a 20 per cent fall in its share price since November 2017.